Tuesday, December 27, 2011

Ms. Kardashian's sin

 She pays what she owes in state taxes under California law, instead of the much larger amount that some self-appointed advocacy group thinks she ought to be paying.

An organization called Courage Campaign and its website reveals it to be a California mélange of activist groups and labor unions. In a video that presents Ms. Kardashian in some of her more conspicuously consumptive moments, Courage Campaign claims that while Ms. Kardashian made more than $12 million in 2010, she paid only one percentage point more in taxes (10.3%) than a middle-class Californian (9.3%).

"That's not OK," says Campaign Courage. And in their video, they get right to the point, calling on viewers to "Ask Kim to support the millionaires tax of 2012." The reference is to a proposed California ballot initiative that would raise the top income-tax rate to 13.3% from 10.3% on income over $1 million—and to 15.3% on income above $2 million.

In the real world, of course, taxes affect behavior all the time. It might be as simple as a mom buying a camera online to avoid paying local sales tax. Or it could be a basketball star such as LeBron James saving more than $12 million a year by signing with the Miami Heat, a team based in a state with no income tax.

The assumption behind the Courage Campaign video is that raising taxes on millionaires wouldn't change Ms. Kardashian's behavior—and the money would fund public services and "critical programs for children."

As a commentator on one blog pointed out, however, if Ms. Kardashian responded to the millionaires tax by relocating, then instead of gaining an additional few hundred thousand in revenue, the state would be out the more than $1 million she's now paying (assuming the $12 million that Courage Campaign lists is all taxable income).

It's tempting to dismiss this campaign as the work of a bunch of California crazies. The problem is that its assumptions about wealth and taxes extend far beyond the Golden State. Indeed, they have calcified into an orthodoxy that defines the Democratic Party. Look at Senate Majority Leader Harry Reid. Two weeks ago, the Nevada Democrat didn't stop at insisting that millionaires turn over more of their money to the federal government. "Millionaire job creators are like unicorns," he said. "They're impossible to find and don't exist."

The point here is that faith in the millionaires tax has moved beyond argument. It matters not that even if the state sucked every last dime from Ms. Kardashian and those who share her tax bracket, it still wouldn't fix California's troubles. Nor will believers be swayed by evidence that our governments have been spending more and more for vital public services and getting less and less in return.

They will not be swayed because they are not being driven by their economics. They are being driven by their conception of immorality: the idea that millionaires have more than they should—and that any wealth they have is not something they have earned but something the state has allowed them to keep. It says much about the progressive Puritanism of our age that what these folks really find most sleazy about Ms. Kardashian is not her sex tape or her marriage, but that she's unembarrassed about making money.

No comments: